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Privacy tradeoffs in smartphone applications

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  • Savage, Scott J.
  • Waldman, Donald M.

Abstract

We use choice experiments to examine privacy tradeoffs in smartphone applications (“apps”). Results show that the representative consumer is willing to make a one-time payment for each app of about $2.28 to conceal their browser history, $4.05 to conceal their contacts, $1.19 to conceal their location, $1.75 to conceal their phone’s identification number, and $3.58 to conceal their texts. These valuations vary for different segments of society.

Suggested Citation

  • Savage, Scott J. & Waldman, Donald M., 2015. "Privacy tradeoffs in smartphone applications," Economics Letters, Elsevier, vol. 137(C), pages 171-175.
    • Handle: RePEc:eee:ecolet:v:137:y:2015:i:c:p:171-175
    DOI: 10.1016/j.econlet.2015.10.016
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Michael Kummer & Patrick Schulte, 2019. "When Private Information Settles the Bill: Money and Privacy in Google’s Market for Smartphone Applications," Management Science, INFORMS, vol. 65(8), pages 3470-3494, August.
    2. Jeffrey T. Prince & Scott Wallsten, 2022. "How much is privacy worth around the world and across platforms?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(4), pages 841-861, November.
    3. Nam, Sangjun & Kwon, Youngsun, 2022. "Quantifying different psychological costs of user behavioral info for overcoming the 'take-it-or-leave-it' condition," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265662, International Telecommunications Society (ITS).
    4. H. Li & A. Nill, 2020. "Online Behavioral Targeting: Are Knowledgeable Consumers Willing to Sell Their Privacy?," Journal of Consumer Policy, Springer, vol. 43(4), pages 723-745, December.
    5. Caleb S. Fuller, 2019. "Is the market for digital privacy a failure?," Public Choice, Springer, vol. 180(3), pages 353-381, September.
    6. Kesler, Reinhold & Kummer, Michael E. & Schulte, Patrick, 2019. "Competition and privacy in online markets: Evidence from the mobile app industry," ZEW Discussion Papers 19-064, ZEW - Leibniz Centre for European Economic Research.
    7. Rehse, Dominik & Tremöhlen, Felix, 2020. "Fostering participation in digital public health interventions: The case of digital contact tracing," ZEW Discussion Papers 20-076, ZEW - Leibniz Centre for European Economic Research.
    8. Kesler, Reinhold & Kummer, Michael E. & Schulte, Patrick, 2017. "Mobile applications and access to private data: The supply side of the Android ecosystem," ZEW Discussion Papers 17-075, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Choice experiments; Consumer demand; Privacy; Smartphone apps;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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